Put simply, Dropbox is an amazingly useful combination of a Web service and a Mac OS X program that work together to make your data accessible from anywhere and to keep it synchronized between your computers. Once you’ve installed the Dropbox application and set up a Dropbox account, anything you place in a special Dropbox folder on your Mac is automatically copied to the Dropbox servers, as well as to any other Macs you’ve set up with that Dropbox account. Similarly, whenever you make a change to data in your Dropbox folder on one Mac, those changes are quickly—almost immediately, as long as you have an active Internet connection—reflected in your Dropbox account on the Web and in the Dropbox folders on your other computers.

Dropbox's systemwide menu

If this sounds a bit like the iDisk feature of Apple’s MobileMe service, that’s because it’s similar…except that Dropbox is fast and reliable. Dropbox is also more secure than iDisk, as files stored on the Dropbox servers are encrypted and are transferred using SSL. Dropbox is also smarter about copying files: It transfers smaller files before larger ones, copies only the parts of each file that have changed, and compresses all data for the trip. And Dropbox is better about handling sync conflicts—if the same document is modified on two computers at the same time, Dropbox keeps both copies, adding a “conflicted” message to the name of one.

If this is all Dropbox did, it would be immensely useful for keeping data in sync between Macs and for making them accessible from any computer with a Web browser. For example, I personally use my Dropbox folder for storing all my in-progress documents, letting me work on those documents from any of my Macs. I can also access those documents using the Dropbox app for iPhones and iPads, and I can even edit them on my iOS devices using apps such as the Elements text editor. In addition, many Mac programs, such as TextExpander and 1Password, can use Dropbox to ensure all your Macs have the same settings and data; and because your Dropbox folder is a standard Finder folder, you can use Automator or a utility such as Hazel to automate task across your Macs. But Dropbox does more—much, much more.

For starters, the Dropbox servers automatically save past versions of each synced file, letting you restore any version from the past 30 days using your account on the Dropbox Website. (You can access this feature quickly by right-clicking or Control-clicking a file in your Dropbox folder and choosing Dropbox -> View Previous Versions from the Finder’s contextual menu.) If you’ve got a Pro account—more on that below—you can opt for the Pack-Rat feature, which lets you restore any past version of a Dropbox-synced file, even those versions more than 30 days old.

But perhaps the most useful Dropbox extras relate to sharing your data, both publicly and privately. For starters, you can share any file within the Public folder inside your Dropbox folder by simply giving someone a special URL for that file. Although you can get this link using the Dropbox Website, the easier way is to simply right-click (Control-click) the file in the Finder and choose Dropbox -> Copy Public Link from the contextual menu. You can then paste that URL into an e-mail message, tweet, or document, and the recipient can just click the link to download the file.

Getting the URL for a file in your Public folder

You can also share entire folders within your Dropbox folder by right-clicking (Control-clicking) on a folder and choosing Dropbox -> Share This Folder. You’re taken to the Dropbox site, where you provide the e-mail addresses of the fellow Dropbox users you want to have access. Once one of your invitees logs in to their Dropbox account and accepts your invitation, your folder shows up inside their Dropbox folder. Similarly, you can access folders other users have shared with you.

When you accept the invitation to a shared folder, it appears in your Dropbox folder, and it acts exactly like any other folder, except that in addition to syncing between your computers and devices, it syncs with the Dropbox folder of the folder’s owner and every other person with whom the owner has shared the folder. So, for example, if I add a document to a shared Dropbox folder on my Mac, that document magically appears on the Macs of every other person sharing the folder. This is a brilliant—and brilliantly simple—approach to sharing files and folders over the Internet without having to fuss with OS X’s File Sharing settings or worry about firewalls, routers, and IP addresses. (It also works great for people in the same location—my family uses a shared Dropbox folder for all household documents and information.)

Finally, there’s a sharing feature of Dropbox that often gets overlooked: Any images you drop into the Photos folder inside your Dropbox folder can be viewed in an automatically generated photo gallery on the Web; you create multiple galleries by simply creating subfolders. (To get the URL for a gallery, just right-click on a folder of photos, or go to your account on the Dropbox Website.) You can even share a folder inside your Photos folder, using the folder-sharing procedure described above, to let multiple people add photos to the same gallery. This is the easiest way I’ve found to quickly create an online photo gallery or slideshow.

While the Dropbox program mostly works its magic behind the scenes, there are a few useful options available to you. One of my favorites lets Dropbox display a Growl notification whenever new or updated files are synced to your local Dropbox folder. Another favorite, added to Dropbox earlier this year, is LAN sync: If you’ve got multiple Dropbox-configured computers on your local network, the Dropbox program on your Mac will contact those computers directly to check for new or modified files, rather than going through the Dropbox servers; any changes will similarly be copied directly from one computer to the other, over your network, rather than over the Internet. The end result is much faster syncing between local computers.

The other big new feature of Dropbox 1.0, Selective Sync, lets you choose exactly which files and folders are synced to each of your computers. For example, if you’ve got a MacBook Air with a small drive, and you don’t want everything in the Dropbox folder on your desktop Mac to be synced to your Air, you can open Dropbox’s settings window on your laptop, click Selective Sync, and then choose only the essential Dropbox-synced files and folders. The rest of your data will still exist on your desktop Mac and on the Dropbox servers, but it won’t take up space on your MacBook Air.

Earlier versions of Dropbox didn’t properly copy file metadata such as Mac OS resource forks, which meant that if you wanted to ensure certain types of Mac files—for example, Internet location files and text clippings—remained usable when synced between Macs, you had to compress them into, say, .zip files before placing them in your Dropbox folder. But DropBox 1.0 fixes that flaw, as well.

One of the few flaws Dropbox 1.0 didn’t fix is that the program still places your Dropbox folder, by default, at the root level of your Home folder, in violation of Apple’s developer guidelines. But at least you can manually change that location in the program’s preferences.

The Dropbox application and a basic account, which can sync up to 2GB of data, are free. If you need to be able to sync more data, you can upgrade to a Dropbox Pro 50 account ($99/year for 50GB of data) or a Pro 100 account ($199/year for 100GB of data). You can also get more space by referring friends—you get 250MB for each friend that creates their own Dropbox account.

Dropbox is an indispensable part of my workflow, and it keeps getting better and better with each release. Now that it handles most Mac metadata properly, it integrates seamlessly with the Finder; and with Web-browser access, as well as Dropbox software—and Dropbox-enabled third-party programs—available for OS X, Windows, Linux, and iOS, you can access and edit your data from anywhere and any device. I have yet to find an easier way to share data with other computers and other people. And did I mention the outstanding documentation? If the developers keep this up, Dropbox just might win another Eddy.

Updated 12/24/2010, 3:45pm to clarify that restoring versions older than 30 days requires the Pack-Rat option of a Pro account.